When evaluating options, we recommend not to rely too much on online family office software reviews. Most review site placements online are, unfortunately, fake or bought (affiliate / pay-per-click). This article gives you the information you need to do your own family office software comparison.
We’ll use the following acronyms in this article:
Reporting software can be standalone or part of a broader family office management software. The best approach is to have ONE platform for all your requirements. That platform manages all dataflows, quality controls and investment workflows. Reporting becomes a simple task of extracting what’s in the platform.
Limina can usually replace multiple systems; contact us if you’d like to learn more about how.
Family office software and data aggregation have almost become synonyms. It’s important to differentiate the two:
1. The FO-SW has functional capabilities like reporting, investment tracking, cash projections, etc.
2. The data aggregation capabilities connect to custodians, market data, and other data sources to ingest data into the platform.
The best family office software has both in one system and automates as much as possible.
A prerequisite for data aggregation is getting data in and out of the system. Most existing family office software vendors will build a connection to each data source (for example, each custodian) and maintain that connection.
This solution has many issues:
At Limina, we take a radically different approach. We allow you to set up a new connection in 3 minutes to or from any custodian (or any other data source). This groundbreaking approach to connectivity is free of charge and is always included in the base subscription. Watch a video of the import/export application here.
Most FO-SW will import cash balances from custody. Importing cash balances is a problematic approach because information is lost; you don’t know what has gone into the balance and what hasn’t.
The other benefit of importing cash movements is that you retain simulation capabilities. The system can then simulate cash fully into the future, knowing what has settled at the custodian and what hasn’t. Without this knowledge, a cash simulation will be uncertain.
The difference between single-family office software and a multi-family office platform is relatively small, especially if the multi-family office operates as a pooled fund vehicle. The multi-FO software must support more complex permissions, especially if the software allows family members to log in to see dashboards and take actions. In case a multi-FO does not pool the capital (and instead invests on behalf of each family member separately), there may also be a need for multi-portfolio rebalancing and order management capabilities.
While regulatory compliance isn’t mandated for FOs, a multi-family office might have discussions about limit control and investment restrictions with each family. In some family office platforms, you can enter their rules and the platform will report on compliance and warn you if any breach has occurred or is about to occur, according to your preferences.
As FOs invest in a wide range of asset classes, it’s essential for a system to support all possible investment strategies. This includes private assets, not just PE funds but also assets like land and art.
Hedge funds and other fund investments should ideally support look-through, both on a constituent level (when you have access to this data) and on a factor level (for example, “20% industrials in Europe”).